Entrepreneurs hope to bank on "angels"

Only a dozen or so potential angel investors attended St. Louis' first Gathering of Angels on Wednesday night, but Steven Reick, for one, was glad to see them. "I got people who would listen to me," said Reick, a lawyer in Hermann,Mo., who told the Gathering about Ferti-Sorb Co., developer of an innovative plant fertilizer. "You don't know where your contacts and your opportunities are going to come from," he said. "It's like fishing." Richard Lesh, who told potential investors about his biotechnologysoftware company, Compass Genomics Inc., said the turnout was larger than at a similar presentation he made last week to the original Gathering of Angels in Santa Fe, N.M. "We got some interest, some people talking to us. That's the key," Lesh said. "The more people you talk to, the sooner you find the investor who's going to be interested in what you're doing."

The Gathering, which started five years ago in Santa Fe, has branched out to eight other cities in the past year. The idea is to give entrepreneurs a forum for talking to wealthy people who're interested in putting money in start-up companies. About half of Wednesday's three-hour meeting was spent mingling over wine and hors d'oeuvres; half was devoted to presentations by four entrepreneurs.

About 25 people attended the Gathering, but roughly a third of those were affiliated with the four entrepreneurs making presentations. Some others said they were there in search of business contacts, not potential investments.  Ed Gotway and D'Arcy Fox, organizers of the local Gathering, estimated that about half of the people in attendance were potential angel investors. Gotway is a professor of computer science at McKendree College; Fox is a retired A.G. Edwards & Sons executive. Gotway said he considered canceling the Gathering after the terrorist attacks Tuesday in New York and Washington, but decided it was important for people to know that Americans could continue doing business after such an event. He displayed an American flag on the wall of the meeting room at the Chase Park Plaza Hotel.

Patrick Fox, who is trying to raise $678,000 to expand his pasta-sauce company, Espressa Foods, said it was too early to judge the success of the local Gathering. But, he said, the concept of an angel-investing group is important for St. Louis.  "It can be a significant boost to an early stage company to have a group of people who have a serious interest in investing in early stage companies," Fox said. ""There is angel investing money in St. Louis, but my experience has been that it's more opportunistic than sustained and systematic."

Without a place to reach large numbers of potential investors, Fox explained, entrepreneurs seeking money have to rely on word-of-mouth referrals, usually by lawyers or accountants.  St. Louis does have other angel-investing groups. The Can-Do Clubs, organized by attorney Marc Braun, are pooled funds that have been investing in start-up companies since 1996. The St. Louis Angel Network held bimonthly meetings for about two years, but went on hiatus this summer while its leaders study ways to make the group more effective.

The Missouri Venture Forum also invites entrepreneurs seeking money to make two-minute presentations at its monthly meetings.  Besides Reick, Lesh and Fox, investors at the Gathering heard from Ben Moll, founder of Desert Energy Resources. The firm has a process to grow seaweed for use in animal feed and is seeking money to open a demonstration farm in Mexico.  Reick and Fox were last-minute substitutes for entrepreneurs from San Antonio and San Diego, who were unable to attend because they couldn't fly here. The Gathering's founder, Tarby Bryant of Santa Fe, also was unable to attend.

Gotway said he plans to have another Gathering here next month, then to alternate monthly meetings between St. Louis and Kansas City.

Reporter David Nicklaus:  dnicklaus@post-dispatch.com

Phone: 314-340-8213

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